In Malawi, the United Nations has listed about 11 projects under a carbon offset scheme that allows developed countries to cash in on its efforts to reduce greenhouse gas emissions fuelling climate change.
These carbon markets are touted as an answer to global warming fueled by emissions by wealthy nations.
The Clean Development Mechanism is marketed as an accelerator for efforts to meet international emissions targets under the Paris Agreement of 2016, which calls for reductions in global warming to 1.5 degrees Celsius by halving carbon emissions by 2030 and to zero by 2050.
Malawi, Gabon, Mozambique, Kenya and Rwanda support the voluntary African carbon markets launched by Kenyan President William Ruto at the 2022 UN climate conference of parties on climate change (CoP27) in Egypt.
During the 2024 Nairobi Summit, he said the carbon market represents an “unparalleled economic goldmine.”
“The carbon sinks have the potential to absorb millions of tonnes of carbon annually, which should translate into billions of dollars,” Ruto stated.
The initiative promises Africa over $6 billion by 2030 and at least $120 billion by 2050, creating about 100 million jobs.
However, African nations and other countries heavily affected by the climate crisis say it is becoming hard to account for the size of credits and revenue generated under the carbon projects.
Among others, they accuse developers and operators, especially from the Global North, of secrecy on the implementation of activities and reinvestment.
ActionAid global lead on climate Justice Teresa Anderson describes this financing option as “a Trojan horse designed to scale up extraction in the Global South”.
He states: “A consistent message from rich countries at climate talks is that their pockets are empty, there is no public finance and that private finance is needed to ‘fill the gap’ in climate finance.
“However, private finance is the way for financial actors in rich countries to scale up their extraction, profits and global leverage over the Global South.”
Malawi has extensive forest and wildlife reserves, which cool the planet, absorb carbon dioxide and refresh the air humans and animals breathe.
President Lazarus Chakwera launched the Malawi Carbon Markets Initiative in Lilongwe in June 2023.
He said carbon trading provides an opportunity “to embrace sustainable green economy and participate in the global fight against climate change.”
The President projected that Malawi can generate $600 million annually by selling carbon credits.
However, a new policy brief shows that this rhetoric has not been matched by financial inflows.
Activists say it only benefits the polluters by advancing further carbon pollution, delaying real climate solutions, enabling corporate greenwashing and disproportionately burdening Africa while allowing wealthy nations and industries to evade meaningful emission reductions.
The brief, produced by Power Shift Africa, indicates that such initiatives as the African Carbon Markets Initiative could lead to 1.5 to 2.5 gigatonnes of new emissions annually, perpetuating inequality and greenwashing.
The climate scientists behind the report, titled ‘Why carbon markets are a dangerous distraction for Africa’, expose how uncontrolled carbon market schemes fuel pollution, delay genuine climate solutions and let wealthy nations off the hook while saddling Africa with lasting harm.
It reads: “Carbon markets do not reduce emissions, but shifts the burden onto Africa where communities suffer the most from the effects of climate change.
“Instead of relying on financial schemes [carbon markets] that serve elite interests, Africa needs direct public investment in clean energy, adaptation, and real emissions reduction strategies.”
Power Shift Africa director Mohamed Adow says the carbon marketing initiative is a smokescreen for polluters and corporations that allow them to keep burning fossil fuels while claiming climate responsibility through offset carbon credit purchases.
“Especially the voluntary ones are a pollution permit for corporations by commodifying avoided or stored carbon, these schemes transfer control over Africa’s land and resources to global and local elites, undermining development while reinforcing inequalities,” he says.
The new report further states that the touted illusion that carbon markets reduce emissions is dangerous because the schemes allow industries to claim net-zero status while continuing polluting activities, as African nations are left to deal with environmental consequences.
African Forum and Network on Debt and Development executive director Jason Braganza says these markets do not serve African interests, but entrench inequalities, misallocate resources and undermine the continent’s sovereignty over land and climate finance.
Alliance for Food Sovereignty in Africa programmes coordinator Bridget Mugambe says carbon trading reinforces power imbalances between rich countries in the Global North and the poor in the Global South.
This, according to the expert, leaves developed nations to buy offsets instead of cutting emissions at the source while African countries to bear the devastating costs.
She says: “Worse still, protectionist measures tied to these schemes often infringe on communities’ land access and ownership rights, threatening livelihoods, food sovereignty and deepening injustice.”
GreenFaith Africa director Meryne Warrah says carbon markets are a distraction from the real work of transitioning to clean energy.
She says: “Africa should not be a carbon sink for industries that refuse to change their business models.
“We need investments in renewables, decentralised power grids, and green jobs, not speculative offset schemes that do nothing to curb pollution.”
The authors call for increased public funding, debt cancellation, climate reparations, tax justice and community-led adaptation projects that will ensure climate action serves the needs of local populations, but financial intermediaries.
